A report by Brazil's Globo newspaper claims it has a recording that proves President Michel Temer endorsed payments to keep former Speaker of the House Eduardo Cunha silent.
Brazil's President Michel Temer on Wednesday denied a report that he had endorsed bribing a jailed former congressman to keep him quiet.
The allegation made in a Globo newspaper report represented a potentially significant blow for Temer, whose administration has lurched from one crisis to another since he took office just over a year ago.
The allegation is one that could have a widespread impact in a nation swamped by graft scandals and a populace furious about it.
In a statement, the president's office said Temer never solicited payments to keep former Speaker of the House Eduardo Cunha silent.
"He did not participate or authorise any attempt to keep Cunha from reaching a plea bargain with Justice [officials]," the statement said.
Cunha led the impeachment fight that removed Dilma Rousseff from the presidency last year and put Temer, then the vice president, into power. Cunha was later imprisoned on a 15-year sentence for corruption.
Temer admits to meeting
The statement from Temer's office confirmed that in March the president did meet with Joseley Batista, chairman of the meat-packing company JBS. According to the Globo report, Batista secretly recorded the conversation with Temer and gave it to justice officials as part of plea bargain negotiations.
The report said that when Temer was told Cunha was being paid to keep silent, the president responded, "You have to keep that up, all right?"
Globo did not release the recording or say how it was obtained.
Temer and Cunha are both members of the same party and were previously allies. But they appear to have had a falling out amid a growing investigation into corruption involving the state oil giant Petrobras. Since it was launched three years ago, the "Car Wash" probe into billions of dollars in kickbacks has put several top businessmen and politicians in jail.
Many believe that Cunha, who was widely viewed as Brazil's most powerful politician before several corruption cases began catching up with him, could provide damaging testimony about dozens of others if he reached a plea bargain with the "Car Wash" investigators.
Globo's report had an immediate impact.
Soon after it was released, both the Senate and Chamber of Deputies stopped sessions that included work on legislation that Temer's administration is pushing in a bid to turn around Latin America's largest economy, which is suffering its worst recession in decades.
"This climate isn't one in which to work," Rodrigo Maia, president of the lower chamber, told Globo news after adjourning legislators.
Opposition politicians took to Twitter and local news channels to call for Temer to resign or be impeached, arguing his government no longer had legitimacy.
In Sao Paulo, Brazil's largest city and a national economic engine, about 2,000 protesters gathered on Avenida Paulista to demand Temer's ouster.
"I came here because I am outraged," said Rafaela Rossi, a 32-year-old drug store owner. "How could Brazil sink so low to have this guy in office when everyone knew that he was not to be trusted?"
Globo's report represents the latest in numerous scandals that have plagued Temer, whose approval rating is hovering around 10 percent.